An Expensive Summer for the NBA

An Expensive Summer for the NBA

Commissioner Adam Silver and the NBA will have to work with a steadily rising cap over the next few years. (AP Photo/Chuck Burton, File)

This summer’s NBA free agency can be described by a single line from Cuba Gooding Jr. in the 1996 hit movie Jerry Maguire: “Show me the money!””

The NBA salary cap astonishingly has jumped from last season’s $70 million to $94.1 million this upcoming season. The NBA’s salary cap has mainly jumped do to the leagues new television deal, which is worth $2.5 billion.

There are also two cap levels that have changed due to the NBA’s rising revenue. The first was the change in the NBA cap floor to $84.7 million, which was previously $63 million.  Now, the second is the NBA tax level, which changed to $133 million this season, when last season’s was only at $84 million.

If a team does not reach the cap floor, they are surcharged for coming up short of meeting the cap floor and the money is distributed to the players on that particular team. The two teams who failed to meet the cap floor this season were the Orlando Magic and the Portland Trailblazers.

Now, if a team goes over the tax level they will be fined accordingly.

Team salary above tax level Non-repeater Repeater
Lower Upper Tax rate Incremental maximum Tax rate Incremental maximum
$0 $4,999,999 $1.50 $7.5 million $2.50 $12.5 million
$5,000,000 $9,999,999 $1.75 $8.75 million $2.75 $13.75 million
$10,000,000 $14,999,999 $2.50 $12.5 million $3.50 $17.5 million
$15,000,000 $19,999,999 $3.25 $16.25 million $4.25 $21.25 million
$20,000,000 N/A $3.75, and increasing $.50 for
each additional $5 million.
N/A $4.75, and increasing $.50 for
each additional $5 million.
N/A

 

The Cleveland Cavaliers led the NBA in fines assessed for being over the tax level. The Cavaliers were fined $54 million. The other Clippers, Warriors, Thunder, Spurs, Rockets and Bulls also were fined for being over the tax level.

The salary cap’s large increase has caused player contracts to increase astronomically. For example, the Memphis Grizzlies’ Marc Gasol last summer signed a  max contract for five years, $113 million. This summer, fellow teammate Mike Conley signed a max contract for five years, $152 million.

Now, teams that are seeking opposing free agents, can only offer them a four-year max contract.  Last summer, the San Antonio spurs signed LaMarcus Aldridge to a four-year, $84 million contract. This summer, Al Horford signed with the Boston Celtics for four years, $113 million.

The money flying around this off-season has other athletes on notice.

 

Expect next year’s cap to also go up. Where its projected to go up to $102 million.

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